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API Customs and Trade Conference
Duty Preference Claims
Q and A with:
Laura Webb, Petroleum and Natural Gas CEE
Cheryl Johnson, Petroleum and Natural Gas CEE
Michelle Forte, Charter Brokerage LLC
March 2016
Entry Verification Selection Process
Certificate/Certification Analysis
Critical Data Points
Good Practices
Q and A
Post Entry Claims
2
LET’S DISH ABOUT FREE TRADE
2
3
Duty Preference Programs and Agreements
4
Why is Duty Preference Important?
Charter uses Remote Location
Filing (RLF) and other systems
to file in all ports through out the
U.S. and Canada
$139,970 v 0
5
Duty Preference CBP verification
Q: Why am I receiving this? The Selection Process
Q: Do all these look the same?
Q: Reference to bill of materials and cost data for
Chapter 27 products?
6
Duty Preference CBP verification
CRITICAL DATA POINTS
• CERTIFICATE OF ORIGIN
• DESCRIBE PRODUCTION
• HOW DID PRODUCT GET FROM PRODUCER TO THE US?
Duty preference programs –Certificate
requirements Special Duty Program Certificate of Origin Form 1. Insular Possession (Y) CBP Form 3229 (exception: CBTPA Form 450 – see rulings) 2. Generalized System of Preferences (A, A* and A+ - BDC / CNL / LDBCD) GSP Form A (although the U.S. will accept generic certificates of
origin) 3. Caribbean Basin Economy Recovery Act (E and E*) Form A (although the U.S. will accept generic certificates of origin) 4. US – Israel Free Trade Agreement (IL) Form A (although the U.S. will accept generic certificates of origin) 5. North American Free Trade Agreement (CA / MX) NAFTA CBP Form 434 6. Andean Trade Preference Act or ATPDEA CBP Form 449 Andean Trade Promotion and Drug Eradication Act (J, J* and J+) 7. US – Caribbean Basin Trade Partnership Act (R) CBTPEA CBP Form 450
8. African Growth and Opportunity Act (D) Form A (although the U.S. will accept generic certificates of origin)
9. US – Australia Free Trade Agreement (AU) Freeform form that complies to the Annex of the Implementation Act 10. US – Singapore Free Trade Agreement (SG) Freeform form that complies to the Annex of the Implementation Act 11. US – Chile Free Trade Agreement (CL) Freeform form that complies to the Annex of the Implementation Act 12. US – Jordan Free Trade Area Implementation Act (JO) Freeform form that complies to the Annex of the Implementation Act 13. US – Morocco Free Trade Agreement (MO) Freeform form that complies to the Annex of the Implementation Act 14. Dominican Republic-Central America –US Free (P and P+) Freeform form that complies to the Annex of the Implementation Act Trade Agreement 15. US – Bahrain Free Trade Agreement (BH) Freeform form that complies to the Annex of the Implementation Act 16. US – South Korean Free Trade Agreement (KR) Freeform form that complies to the Annex of the Implementation Act 17. US – Peru Free Trade Agreement (PE) Freeform form that complies to the Annex of the Implementation Act 18. Colombia – Trade Promotion Agreement (CO Freeform form that complies to the Annex of the Implementation Act 19.Panama – Trade Promotion Agreement (PA) Freeform form that complies to the Annex of the Implementation Act
7
Exporter Name & Address
(TAX ID – NAFTA REQUIRED)
Producer Name & Address (Tax ID) –
“Available upon Request”
Importer Name & Address (Tax ID) –
“Available upon Request”
Blanket Period
• Blanket vs. Transactional
• Does your shipment fall within the boundaries of that executed COO?
Description of Goods (include HTS
Classification to 6 digits)
Preference Criterion
• Wholly obtained/produced or tariff shift?
• Correct format for preference criterion is important
• Example: “A” for NAFTA, but “Art. 4.1(b)” for CTPA
Country of Origin
Very important field:
Is the Certificate properly signed and dated by a
person with the requisite knowledge/authority to
make the claim?
Are all fields completed?
Certificate Of Origin Evaluation
8
What is Wrong with This COO?
9
What is Wrong with This COO?
10
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Duty Preference – Direct Shipment
SO YOU DECIDED TO TAKE A LITTLE DETOUR???
If the good transits an intermediate country (i.e. a transshipment) the duty preference may be lost.
If another country is involved in the transportation route then must be able to demonstrate that the cargo:
1. Did not enter into the commerce of that country (check program) 2. Remained under customs custody and control (check program) 3. Did not undergo any processing 4. Only subject to loading and unloading
13
Duty Preference Critical Data Elements
DOCUMENT
REQUIREMENT
EXPECTATION ADDITIONAL CONSIDERATIONS
• Certificate of Origin
• Certification
• Must be issued by exporter
(NAFTA)
• May be issued by producer/
exporter /importer
• Must be on-hand at the time duty
free claim made (and validate
with correspondence)
• Must be dated before or at the
time the claim for FTA treatment
is made
Statement/documents as
to how the good qualifies
as originating under the
particular program
• Detailed description of the
process by the producer –
signed and dated by
authorized representative
• Schematics/diagrams
• For products - worksheet of
all input materials with their
source, origin & HTS
• Was it wholly obtained product
of the country?
• i.e. Crude– see testing records
below
• Was it processed in the country
from inputs that were sufficiently
changed as per the rule of origin
requirements? i.e. crude to
gasoline
Testing/Analysis COA with results for:
API Sulfur Nickel
Vanadium
Detailed Hydrocarbon analysis, if
necessary
14
Duty Preference Critical Data Elements
DOCUMENT
REQUIREMENT
EXPECTATIONS ADDITIONAL CONSIDERATIONS
Proof of Direct Shipment
-
document from country
of production to US
showing there was no
transshipment of the
good
• Show movement of cargo
from production site to the
carrier
• Cargo loading
• Bill of Lading
• Cargo Manifests - CBP Form
1302 - AMS record
Some ports have requested
identification of the exact shore
tanks from which cargo was
loaded onto the carrier
FTZ withdrawals Original 214 admitting the
cargo into the FTZ
Product description -
confirm correct HTS
Any inconsistencies?
Need explanation
Product entered as crude
identified as condensate on load
and shipping documents but
labeled as naphtha on the COA
and DHA.
Proof of payment to the
foreign seller for the
product
3d party bank records Internal enterprise system
screen shots?
15
Duty Preference - Good Practices
Records must be produced upon request by CBP (30 days) – no
Extensions?
What about product withdrawn from an FTZ– any specific issues?
What are the touchpoints to look for when there has been a stopover
before direct shipment from export country to the US?
What about Preference Code differences?
Good wholly obtained or produced exclusively from originating
materials – scope?
Distinction between A and C?
Language translation
What if foreign supplier is state owned?
Communicating the Results
11 15
• 19 CFR 163.6 -the entry records shall be produced within 30 calendar days of receipt of the request
• Necessary?
Response Due Date Inconsistency
Signing CF 28?
•Multiple Nomenclature for same product
592 Penalty Threatened for Alleged Misclassification
• Benefits? Multiple CF 28 issued for same entry by different CBP officials
Sending CF 28 to Supplier – adequate communication?
•Use of different format (see next page as example)
Issuing 20-25 FTA requests simultaneously?
Some Process Changes?
16
13
Questionnaire to Supplier
17
1
8
Post Entry Preference Claims- Overview
For many US FTAs the importer has up to 1
year to claim preferential duty
1520(d)
DR-CAFTA; Chile, Peru, Korea, Colombia, NAFTA, OMAN,
Panama, Peru
All others use PSA
No Claim can be made at entry
What about FTA Recon?
Benefits v
Restrictions
Questions